Property investment can seem like a brilliant idea, especially in the wake of turbulent economic times. The rental market is seldom affected by things like recessions because, of course, everyone needs a place to call home! Sure, the construction industry might take a hit during rough economic patches, but the general market for buying and selling homes is never stagnant.
As you know, there are all kinds of properties that one can buy and either rent out or sell on for a profit. From studio apartments to sprawling mansions, there a property out there to suit everyone’s needs. If you would like to invest a large sum of cash, you may have thought property investment being the obvious answer.
But, how much do you know about investing in properties? It’s important you know all the facts so that you can make an informed choice. Here is what you need to know:
Research is something you can’t skip when buying properties
Some people will tell you that you only need to look at a house to determine if it’s a “good buy” or not. But, what they won’t say is that you need to couple a home viewing with plenty of prior research! For instance, you need to learn more about:
- Local amenities;
- Crime statistics;
- Demographics of people living in the area; and
- Employment options.
That’s because the above points are things both renters and homebuyers alike factor in their decision-making process. In essence, if you invest in real estate in a bad area, you could end up losing a lot of money! On the flip side, the perfect property can virtually guarantee you a healthy return each year.
Sometimes your property will remain vacant
Yes, the rental market is always growing, regardless of the area. But, if you choose to market your property at the wrong time (i.e. before Christmas), expect it to be empty for a while! Timing is everything in life, and that rings true with property rentals. Be sure to time your property marketing well to secure a tenant sooner rather than later.
You need to invest in modern fixtures and fittings
Don’t expect to buy a fixer-upper and not have to pay anything to bring it up to a habitable standard! Likewise, it would be naive to think that a functioning property will never need any repair work in the future.
Be sure to put aside some money to budget for any maintenance costs, either at the time of purchase or during a tenant’s stay.
You must do comprehensive background checks on tenants
It doesn’t matter if you’re renting out a summer beach house or a family home near the city. It’s vital that you check your tenants are who they say they are and can pay the rent. Otherwise, you could end up with an expensive problem on your hands (not to mention some freeloading tenants)!
Property investment isn’t a get rich quick scheme
Last, but not least, you need to consider that property investment is a gradual process. It doesn’t matter whether your plan is to flip houses or create a rental property portfolio. In any event, things WILL take time – so prepare yourself for the long haul, and you won’t have a bumpy ride!